Syrians Turn to Backyard Refining as War Reaches Oil

A man pours crude oil brought from Deir Ezzor province into a pit where it will be distilled as part of the refining process to produce fuel in the Al Raqqa countryside of Syria. Photographer: Alice Martins/AFP/Getty Images

April 25 (Bloomberg) -- In an open field northeast of the
Syrian city of Aleppo, teenagers set fires under large vats of
crude oil and siphon the byproducts into jerry cans.

The scene, captured on footage and uploaded onto YouTube,
shows a young man walking around fires and through smoke near
the town of Al Bab, explaining the production of mazut, used for
home heating, and diesel at his homemade refinery.

“Of course, it’s dangerous,” the young man says with a
shrug and a half smile. None of the children, some as young as
five or six, wears any kind of protective gear.

Two years after the start of the uprising against President
Bashar al-Assad, “significantly more” than 4 million Syrians
are homeless, short of food and reliant on aid within the
country, while an additional 1.1 million have fled abroad, the
United Nations says. Syria’s oil exports, which once provided a
quarter of all government revenue or about $3 billion a year,
have almost completely ended.

“Oil is the only thing that Syria has going for it,” says
Joshua Landis, who runs the Middle East program at the
University of Oklahoma. “Farming has collapsed, and that is why
we are seeing this outflow of refugees, they are starving, they
don’t have the basics to sustain them.”

The European Union eased an oil embargo to allow crude
exports from rebel-held territory on April 22, saying it sought
to promote the economy in opposition-controlled areas. Even so,
it’s unclear who controls the oil fields and whether shipments
can be resumed.

‘Very Sketchy’

“There is also little proof the national coalition has
much oil under its control,” David Butter, associate fellow of
the Middle East and North Africa program at London-based Chatham
House said. “It’s all very sketchy.”

The fields of the east and northeast are in areas where
Islamist militants predominate, the Economist Intelligence Unit
said in an April 24 report.

“The majority of the fields are controlled by al-Qaeda;
some by the Free Army; some others by the Kurds,” said Rami
Abdurrahman of the Coventry, England-based Syrian Observatory
for Human Rights. “We cannot confirm what percentage each
controls.”

Syria’s Cabinet denounced the EU move on April 23 as an
attempt to buy “terrorist” oil and said no one would be
allowed to steal the country’s resources. A month earlier,
Minister of Petroleum and Mineral Resources Suleiman al-Abbas
met the Russian and Chinese ambassadors to discuss oil and gas
exploration and development, the state-run SANA agency said.

Oil Concessions

The lifting of the EU embargo will allow crude exports from
rebel-held territory, the import of oil and gas production
technology, and investments in the Syrian oil industry. Syria
began issuing concessions to oil companies in the 1930s, when it
was run by the French, and production began in the late 1960s.
Royal Dutch Shell Plc, Chevron Corp., and Total SA were among
companies working in ventures with the state-run Syrian
Petroleum Co. before the war.

In other footage, men are seen collecting output from the
homemade refineries in Darat Izza, northwest of Aleppo city,
their efforts filmed and uploaded to Syria Video, a website
funded by the Center for Middle Eastern Studies at the
University of Oklahoma.

Child Deaths

Against a backdrop of olive trees and rocky hills, a man in
an open shirt and jacket details his prices: Benzene fetches
11,000 Syrian pounds ($157) per barrel and mazut 12,500-13,000
Syrian pounds.

It’s dangerous work, two children died shortly before the
filming, one of them immolated during the refining process, he
says. “We abandoned farming,” he tells the film crew.
“Everything we had is gone.”

Syrian oil production averaged 400,000 barrels per day
between 2008-2010, according to the U.S. Energy Information
Administration. In the 12 months leading to the start of
protests in March 2011, virtually all of Syria’s oil exports
went to Europe and Turkey, the EIA said.

Contested Territory

Proven reserves stood at 2.5 billion barrels as of January
2013, according to estimates in the Oil & Gas Journal. That’s
more than all its neighbors except Iraq, which has proven
reserves of 141.35 billion barrels, according to OPEC.

Yet this wealth, and the power and heating it produces for
homes and vehicles, is tantalizingly beyond the reach of all
Syria’s warring parties.

While Syrian state-owned refineries in Homs and Banias
remain under government control, oil supply from the contested
fields is limited.

As for the opposition, trucking crude across contested
territory to Turkey or Iraq would be difficult, while much of
the internal pipeline network is controlled by Assad’s forces,
Landis said.

“Syria is not going to be able to right itself until it
can establish a reasonable economic regime and oil is at the
heart of that,” Landis said.

Until that happens, the boys of Al Bab and their homemade
refinery will be among the few Syrians profiting from the
country’s natural wealth.

Do they make any money, they’re asked on the video? “We
want to help people, brother,” the boy says. “Mainly for food
and drink.”